Monthly Archives: August 2011

If it wasn’t for advertising, we wouldn’t have television, newspapers… or Google, to name a few things. But we would have music. And places to listen to live music. As the most abstract of the arts that also happens to be enjoyed by pretty much everyone, music is different. Not all of it, but certainly the best of it. What isn’t different is the Verizon Wireless Music Center and the Verizon Wireless Music Center. While far from alone, Verizon is really into putting their names on places…

Previously Ape Con Myth explored the history of the Dow Jones Industrial Average through the lens of the Tao Te Ching in a project known as The Tao Jones. Given the recent activity in the market, we have returned to that work to seek wisdom, or at least some perspective and an update on a couple of charts…

On day one, May 26th, 1896, the Dow closed at 40.94.
Yesterday, 31,246 trading days later, it closed at 11,236.77.
What happened in-between? Here’s everything:

(click to enlarge)

While there was plenty of drama beforehand, below we zoom into more recent history, starting in 1982 when the Dow left the 1k threshold behind after 18 years of bouncing between 800 and 1,000. Taking the powers of ten as developmental milestones, the Dow is currently working to leave 10,000 in the dust. It first crossed the line on March 29th, 1999. Since then it has recrossed that line 34 times, the last just under a year ago on August 27, 2010.

Don’t be surprised if it has to again.

(click to enlarge)

Yet, all hope is not lost! Although they currently put the Dow around 9,500, Ape Con Myth’s ‘not-to-be-considered-investment-advice’ projections say dawn will break in mid-2013, with 30,000 waiting for us by the end of the decade.

In case you left the office on Friday for a weekend in the woods and are wondering why the sky is falling this fine Monday morn, Standard & Poor’s has downgraded the long-term sovereign credit rating of the United States from AAA to AA+.

(!)

What does it all mean? How did it come to this? As usual, the answer depends on whoyouask, which might mean no one really knows, but who would be qualified to say?

The problem with taking this as seriously as one might was summed up by Ezra Klein in the Washington Post:

Standard Poor’s didn’t just miss the bubble. They helped cause it. They were paid by the banks to award their AAA-stamp of approval to all manner of financial products that were anything but riskless — which, ironically, makes them an accessory to the resulting explosion of U.S. debt. You’ve heard the old joke about chutzpah being a young man who murders his parents and then pleads for leniency because he’s an orphan? S&P has chutzpah. All the credit-rating agencies do. It’s built into their business, which requires them to assess the stability of markets they helped crash. It’s long been my position that the credit-rating agency model is broken and, at times, dangerous, and investors need to pay less attention to their pronouncements.

It makes it feel like (bad) theater, or simply a publicity stunt, but so have the actions of the U.S. government, as S&P pointed out:

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy.

As far as Ape Con Myth is concerned though, the major rating agencies showed their lack of judgment on the day they picked their names, which are all right up there with Okay Cleaners and Three Star Muffler.

How many people does it take to make the not-so-merry-go-round go round? If you’re talking about the United States economy in 2007, which we are, then the answer is 146,047,000 people, or … wait for it … 48.4% of the population.

Did you think it would be more? Either way, it certainly brings new meaning to the next logical question: How does the other half live?

Let’s look at some basic numbers:

As you would expect, kids and the retired account for much of this other half who magically don’t have jobs, though there are about 50 million working-age wizards out there. It’s interesting to know whether they want a job or not, but isn’t the real question, do they need one?

Meanwhile, ‘Civilian Noninstitutionalized Population’ is one of the creepier ways of speaking about people over 15 years old who aren’t in the military, prison, a nursing home, etc. How about Civilian Labor Force Pool or simply People Who Can Work?

While the Institute for the Study of “Making a living” will continue to explore how the noninstitutionalized do and don’t make ends meet, ACM’s take-away is that it didn’t take everyone to create the world’s largest economy in 2007. The next question is, how many of those jobs were mission critical?